Here is another area of handling uninsured/underinsured motorists insurance bad faith claims that got murkier with the King and Bottini cases that we discussed here. As confusion spread from the Bottini concurring opinion, it was more important than ever for Florida insurance bad faith lawyers to include the bad faith claim, and often a declaratory action count, from the beginning of your UM case to avoid the prospect of needing to try damages all over again in the bad faith case. If you didn’t bring the counts together and only later sought to amend your complaint to add the bad faith count, then you risked having to try the bad faith in a separate count.
The law in this area has always been a bit hazy. On one hand, there is no doubt that any bad faith claim would be unripe until liability and damages are determined. Blanchard v. State Farm Mut. Ins. Co., 575 So. 2d 1289 (Fla. 1991). On the other hand, in Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005), the Florida Supreme Court suggested that insurance bad faith actions could be filed at the same time as insurance coverage actions, and courts could use tools like abatement to ensure fair discovery in both causes. Lately, decisions from federal or state courts have emphasized the propriety of abating a bad faith claim that is brought with the underlying claim, rather than dismissing it.
For instance, the Middle District of Florida recently ruled in favor of abatement. Relying on long authority establishing that a bad faith claim can be abated rather than dismissed, the court found “judicial economy weighs in favor of abatement” and ordered a bad faith count abated pending resolution of the underlying uninsured motorists claim rather than dismissing it outright. Leuty v. State Farm Mut. Auto. Ins. Co., Case 8:13-cv-03038-MSS-MAP (M.D. Fla. June 16, 2014).
And there was an excellent ruling for trial courts and injured plaintiffs out of the Fourth District Court of Appeals. In Safeco Insurance Co. of Illinois v. Beare, Case No. 4D13-3104, 2014 WL 4626851 (Fla. 4th DCA Sept. 17, 2014), the court held that it was not a departure from the essential requirements of the law to abate an uninsured/underinsured motor bad faith claim rather than dismissing it. That remained the case even if the insurance company is irreparably harmed (at least according to Fourth District precedent) because it cannot remove the bad faith claim to federal court.
Beare is further clarification for trial courts – their rulings permitting a bad faith claim to be brought with an underlying claim, then abated, will not be quashed on certiorari review. The First District similarly refused certiorari under different circumstances earlier this year in Safeco Insurance Co. of Illinois v. Rader, 132 So. 3d 941 (Fla. 1st DCA 2014). Rader held it was not a departure from the essential requirements of the law to deny an insurer’s request to enter final judgment on a UM claim after the insurer tendered policy limits, and instead grant the plaintiff’s motion to amend to add a bad faith claim. (Rader went even further than Beare would by holding that there order at issue did not cause irreparable harm.)
But in a case much like Rader, the Fifth District in Geico Casualty Co. v. Barber, Case No. 5D14-427, 2014 WL 3966053 (Fla. 5th DCA Aug. 15, 2014), reaffirmed its Fridman holding. In Barber, the plaintiff had not pleaded a bad faith or declaratory action claim. Accordingly, when the insurance company filed a notice of confession of judgment, the trial court lost all jurisdiction to do anything other than enter judgment for policy limits – and it should not have granted the plaintiff’s motion to amend to add a count for declaratory relief.
Cases such as Barber serve as important warnings – or at least until the Florida Supreme Court rules in Fridman. Sure, courts are now rejecting the rule in King or the Bottini concurring opinion, which would give every insurance company committing bad faith at least two cracks at undermining the damages of the plaintiff hurt by its bad faith. But if you don’t bring the bad faith claim with your underlying claim, or don’t amend before the insurance company confesses judgment, then you might be asking for additional delays and trial costs.
To register to download the forms needed to properly amend and seek abatement, or to bring the bad faith and UM benefits claims at the outset, you can visit https://www.swoperodante.com/login/referring-attorneys-login/.)
